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Innovation = Open Source and Proprietary Software

[…] open source projects also put intense market pressure on the proprietary alternatives to innovate and add value. As open source alternatives to proprietary applications succeed, they will drive down the cost of the proprietary alternative effectively turning the application into a commodity. For example, if the core course management system is a commodity, commercial enterprises must seek new ways to add value to generate revenue from that commodity. One way to do so is to sell innovative new capabilities protected as proprietary software. Eventually the open source movement will replicate the commercial innovation and the company will need to find new capabilities to continue adding value. This healthy cycle perpetuates innovation.